Energy networks and markets

Arche’s expertise in Australia’s National Electricity Market (NEM) is unparalleled. 

The NEM is at the forefront of the global energy transition and its response to the energy transition is being watched closely by other countries.

It incorporates a mix of energy sources, including coal, natural gas, hydro, wind, and solar power. 

The energy mix on the NEM has been shifting over time, with a growing share of renewable energy as Australia moves towards decarbonising its electricity supply.

Arche Energy’s people are industry leaders in all facets of the NEM and have written several deep dive blog posts on several of them and their real-world effects. 

We take a different view to most when advising on network connection options. Our experience with innovative concepts such as CopperString, New England Link and the NSW REZs is unique in the industry.

Overviews of a few aspects of the NEM are below. You can also book a private seminar with one of our experts on the details of the NEM here.

About the NEM

Australia's eastern and southeastern regions, covering New South Wales, Victoria, Queensland, South Australia, and Tasmania. It operates across a vast area, with reliable electricity.

Grid integration and stability

The fluctuating nature of renewable energy generation requires careful management and coordination to ensure grid stability, balance supply and demand, and maintain reliable electricity supply.

Market intelligence and market entry

Energy transition consultants provide market intelligence by analysing trends, competitive landscapes, and emerging opportunities in the renewable energy sector. They help clients identify target markets, develop market entry strategies, and establish partnerships to accelerate their presence in the clean energy market.

Market design and reform

Australia's energy market design and regulatory frameworks were initially developed for free market economics. Adapting the market design to accommodate increased government intervention, subsidies and support required to enable transition can be complex.

The existing energy infrastructure in Australia, including transmission and distribution networks, was primarily designed for synchronous generation. Upgrading the grid infrastructure to accommodate the increased penetration of non-synchronous renewable energy sources, facilitate bi-directional energy flow, and support distributed generation is essential but requires substantial investment and planning.

Solving energy network challenges is at the core of Arche’s business.​

Energy networks around the world are in a period of intense change as they shift towards renewable sources providing a larger portion of energy generation. 

Among the challenges presented by the energy transition are the variability of wind and solar, grid stability, incorporating decentralised energy resources, and vetting and integrating new technologies into existing infrastructure. 

Arche manages network connections for new generation projects, including:

About energy networks

An energy network is the infrastructure that distributes energy from generators to homes, businesses and services like schools and hospitals.

Australia's eastern and southeastern regions, covering New South Wales, Victoria, Queensland, South Australia, and Tasmania. It operates across a vast area, with reliable electricity.

Transition

Electricity is generated at power plants that use either fossil fuels like coal and natural gas, nuclear power, or renewable resources such as solar, wind, hydropower and geothermal.

Distribution

Substations transform the electricity to lower voltages and distribute it to homes, businesses, and services as they need it.

Grid management

Electricity networks are managed by grid operators that maintain the balance between electricity supply and demand by managing the flow of electricity across the network and ensuring reliability.

To ensure electricity is supplied consistently across borders and regions, interconnector infrastructure links neighbouring energy networks. There’s an in-depth exploration of interconnectors, trading intervals and the Inter-zone Settlement Residue on our blog.

Modern energy networks use digital technologies to gather and analyse data to improve the monitoring and management of energy flow. Smart grids also enable better integration of renewable energy sources and improving reliability.

About energy markets

Energy markets are essential for the functioning of modern economies as they provide a structure for energy to be traded, its prices set, and supply and demand balanced.

An energy market is a system where energy commodities, such as electricity, natural gas, oil, or renewable energy, are bought, sold, and traded. These markets are crucial for determining the prices of energy and ensuring its availability to meet consumer demand. 

An energy market like the NEM determines the price of energy by using:

  • spot markets where energy is traded for immediate delivery, with prices fluctuating based on real-time supply and demand
  • futures markets that pre-sell energy at predetermined prices to mitigate risk and price volatility
  • capacity markets in which generators are paid for having the capacity to produce energy, even if it’s not actually generated, to ensure reliability.

 

For a detailed tour of the NEM, book a private seminar here.

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